Question: I was born in 1952. Seven years ago, my ex and I divorced after 25 years of marriage. During our marriage, I worked for his business, without pay, so we did not contribute to my Social Security fund.
I have been employed for a state higher education institution for seven years, and combined with my pre-marriage-employment Social Security earnings, have sufficient credits to draw retirement, at a lower benefit amount than that of my former spouse. I would like to relocate to California to be nearer to my children, but I am not entirely confident that I can secure a job. May I retire before 65, draw divorced spousal benefits, and continue to earn credits toward my own Social Security benefits? And would that make financial sense? Thank you.
Answer: I recommend you use a top-notch software program to examine your options, including how your benefits will be affected by your future earnings. There are many factors here. I presume your state higher education institution job is covered by Social Security. If not, and if you are going to receive a pension from this non-covered employment, you will get zapped by the Windfall Elimination and Government Pension Offset provisions.
But let’s assume you have enough credits in covered employed and will not be getting a pension based on non-covered employment. Let’s also assume your ex will be over 62 when you reach 66 — in four years. In this case, you can collect a full spousal benefit starting at 66 (your full retirement age), which will equal half of your ex’s full retirement benefit (not what he actually receives as a retirement benefit).
But you can only collect a full spousal benefit if you file just for your divorced spousal benefit and not for your own retirement benefit. Otherwise, they will give you your own retirement benefit plus your excess spousal benefit, which may be small or zero. If you then wait until 70 to collect your own retirement benefit, it will be 32 percent larger after inflation than at 66 and may exceed half of your divorced spousal benefit. In this case, at 70, your monthly check will rise. Also, by continuing to work, you may raise the level of your full retirement benefit upon which your age-70 benefit is also based.
Now to your question. If you file for your divorced spousal benefit before age 66, they will give you your reduced retirement benefit plus your excess spousal benefit. This is called deeming. Because you’d be trying to collect a spousal benefit before full retirement age, you’ll be deemed to be also filing for your own retirement benefit. This forced filing for your own retirement benefit will transform your spousal benefit into an excess spousal benefit.
The only way you can collect a full spousal benefit, while letting your own retirement benefit grow, is to wait until full retirement age and file what’s called a “Restricted Application” just for your divorced spousal benefit. You can’t file such a restricted application until you reach full retirement age. Even if you suspend your own retirement benefit at full retirement age, just the act of filing on your own for your retirement benefit, or being forced to, will mean you can never get a full spousal benefit (a divorced spousal benefit just by itself) while letting your own retirement benefit grow through age 70, at which point, if it’s large enough, you’d see your monthly check increase.
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